New Jersey to Implement Fee Schedule for PIP Payments

By | August 12, 2009

The New Jersey Department of Banking and Insurance can legally implement a fee schedule for doctors who treat patients with injuries covered through Personal Injury Protection (PIP) coverage, a New Jersey Court has ruled.

The fee schedule, which some doctors say is too low, is tied to recent reforms in the state’s personal auto insurance market.

The fees were determined by state regulators based on a prevailing rate of 75 percent of doctors within a given region. The use of the schedule, however, has been held up in litigation since 2007, following a suit by the Medical Society of New Jersey, a trade group for doctors, which argued that the fees were too low. They also challenged the use of a health-insurer owned database system to determine the rate.

The court, in ruling against the doctors did enjoin the use of that database, perhaps setting the stage for further wrangling over rates.

Insurers groups, however, such as the Property Casualty Insurers Association of America (PCI) supported the use of the fee schedule and are trumpeting the court’s decision as a victory for reform.

“This long-awaited ruling will enable New Jersey to move forward with an important reform to the PIP reimbursement system which is expensive, inefficient and anti-consumer,” said Richard Stokes counsel for PCI. “Implementation of the PIP medical fee schedule is an important component in controlling costs in New Jersey. While the state has made progress in addressing many of the conditions that contribute to higher auto insurance costs, medical care continue to be expensive. The new PIP medical fee schedule will put in place a system that is fairer and ultimately delivers cost savings.”

Topics New Jersey

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